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There are many different aspects to mobility. It serves us in our
daily lives, but can also be a tremendous source of pleasure. At the
BMW Group, we have 130,000 men and women full of energy and passion
working daily in developing mobility.

Many of them are watching today. I would like to start by addressing
you, our employees. You are what make the BMW Group so strong and
unique. I would like to take this opportunity to say thank you to all
of you: Together, we ensure this company’s continued success. That is our obligation towards our shareholders.

Allow me to welcome you all – everyone here in the Olympiahalle and
those joining us via internet – to the 98th Annual General Meeting of
BMW AG!

Some of you, Ladies and Gentlemen, have been with us for many
years. You know that the BMW Group is built on a solid foundation. It
is more than 100 years of experience that has enabled us to master
major changes in the past and to take on those to come. We have the
strength and confidence to see us through the current transformation.
Our premium aspiration is to be at the forefront. With the biggest
model offensive in our history, we are issuing a challenge to our
competitors. We are the number one in electrified vehicles in Europe
and Germany. All our brands and model series are going electric. That
shows our consistency. That’s the future.

2017 was our eighth consecutive record year:

We sold more than 2.4 million cars and

164,000 BMW motorcycles and scooters.

Group earnings before tax exceeded ten billion euros.

And, most importantly for you: We are the most profitable car company
in the world.

That, Ladies and Gentlemen, distinguishes Your Company – and you, our
shareholders, should share in this success.

For 2017, we are proposing our highest dividend ever: 4.00 euros per
share of common stock and 4.02 euros per share of preferred stock. Our
employees in Germany will also benefit through our profit-sharing programme.

Fairness promotes unity – which is what our society needs. At BMW, we
face the challenges ahead together. That is our culture.

In a complex, fast-paced world, there are no easy answers; commercial
success cannot be taken for granted – especially over the long term.

The car industry is currently facing some criticism as well as strong
regulation, although individual mobility will remain a very popular
mode of transportation.

The truth of the matter is that the behaviour of certain
manufacturers has damaged our industry as a whole.

Ladies and Gentlemen,

There is one thing I would like to clarify at this point: A mistake
was made a few years ago, involving previous model versions of the BMW
5 Series and 7 Series, which were fitted with an engine control
software we believe had been correctly developed. These models were
later fitted with a software module not designed for them.

To be clear: This has nothing to do with deliberate manipulation,
either of engine control or exhaust gas treatment. We are now awaiting
approval from the authorities, so that we can provide a corrected
software. A maximum of 11,700 vehicles are affected. To put that into
perspective: In the last five years alone, the BMW Group delivered
more than 11 million cars to customers. We were the first manufacturer
to use a multi-phase exhaust gas treatment concept – which proved very
successful: Our Euro 5 and Euro 6 diesels in Germany are around 40
percent below the average NOx figures published by the German
Environment Agency. In further tests conducted by the German
automobile club, ADAC, investigating the NOx emissions of Euro 6
diesel models, BMW and MINI models performed very well. The BMW 520d
and 530d were much lower than the future limits for road driving
tests. We keep our word. In Germany, we are implementing the decisions
adopted at the National Diesel Summit. This means that our Euro 5
diesel models from 2011 or later will get a software update. But, we
will also speak out if something is not technically viable: upgrading
hardware. Responsibility is part of our core values. That is also how
we are handling allegations of unlawful cartel arrangements. The
European Commission has not yet completed its evaluation in this matter.

Dear Shareholders and Shareholder Representatives,

I ask that you continue to place your trust in the BMW Group! BMW
charts its own clear path, as set out in our Strategy NUMBER ONE >
NEXT, which provides us with a strategic roadmap up to 2025, with
three main priority areas: Electrification, BeingGlobal, and Products and services.

Ladies and Gentlemen,

As I have often emphasized, the e-mobility growth curve is constantly
rising. Our first-quarter sales confirm this: We sold over a third
more electrified vehicles worldwide, and almost 80 percent more in the
US. That’s all I want to say about our figures. I also want to tell
you about an experience that touched me on a personal level: In
December 2017, I handed over our 100,000th electrified vehicle at BMW
Welt: a BMW i3. I admit, I expected the customer to be a young person
who was already familiar with electric driving. But, it was actually
an 80-year-old gentleman, standing in front of me with a big smile on
his face. He had spent his whole life driving rival models with a
combustion engine. I think this demonstrates: It is never too late to
switch to BMW and our electric models. That same evening, we lit up
our Group headquarters, the BMW Four-Cylinder, as a battery. I watched
from the Olympic Park, with a group of employees, and it really was an
emotional moment. 100,000 electrified vehicles in 2017. Promised and delivered. That is BMW.

Our course is clearly mapped out:

At least 140,000 electrified vehicles in 2018.

25 electrified models by 2025 – 12 of them pure electric.

By the end of 2019, we will have a total of half a million electric
models and plug-in hybrids on the roads. We have already a quarter of
a million today. Two models illustrate our progression to a new
dimension: the BMW i4 and the BMW iNEXT. The BMW i4 Concept was the
star of last year’s Frankfurt Motor Show. A few years ago, “project i”
started out as an independent project. Now, the letter “i” is coming
to our core BMW brand. Going forward, all pure electric BMW models
will sport the “i” badge and come equipped with fifth-generation
battery technology. With an increased range of about 700 kilometres,
electric models will become entirely practical for everyday use.

Parallel to the i4, we are also developing the BMW iNEXT. Today, we
wanted to give our shareholders an exclusive first glimpse. And I can
reveal that we will be presenting the iNEXT as a vision vehicle later
this year. It is our modular system for the future. If that sounds a
bit like Lego, that’s roughly the idea. The iNEXT will benefit the
entire company and all its brands. For the first time, we are
combining all key technologies for future mobility. The iNEXT is fully
electric, fully connected, and enables safe, partially autonomous
driving. Further models will follow.

We are working on autonomous driving at our campus outside of Munich,
which we announced in 2017 and opened in April of this year. Once
again – promised and delivered. That is BMW. The campus idea is all
about short distances, fast decisions and agile working. 1,800 experts
from different countries work together there. We are developing the
cars of the future right here in Germany. And we will build them here
as well: the i4 in Munich, and the iNEXT in Dingolfing.

Bavaria will always be our home. From here, we drive technological
innovations and Industry 4.0. We produce more than half our vehicles
abroad. But nearly 70 percent of our employees are still based in
Germany. For me, that shows our strong commitment to our roots. These
roots give us stability in a global world.

And that brings me to my second point: Being Global.

Our production network comprises 30 locations in 14 countries. We are
enabling our plants for a wide range of drive trains, using flexible
architectures. From 2020, we will be able to fit all model series with
any type of drive train. Today, we are already producing electrified
models at ten locations worldwide. Not many manufacturers can say the
same. Three major markets are crucial for us: Europe, China and the
US. They each differ in terms of political demands, customer desires
and culture. In Europe, for example, we are
facing strict regulations on emissions, which we will continue to
comply with. The BMW Group benefits from the European single market
and remains committed to Europe. The EU has to be competitive to play
an appropriate role in the world.

But internally, Europe also needs to be fit for the future.
Particularly in the areas of connectivity and autonomous driving, we
need consistent legal rules and a 5G standard throughout the European
Union. On the topic of e-mobility: Europe needs to take on a leading
role. We need to create an internal European market in digital
infrastructure and e-mobility. The close ties between Germany and
France are fundamentally important to Europe. However, the UK must
also remain close to the EU. We will start building the first fully
electric MINI in Oxford in 2019. It is therefore important that access
to the EU internal market remains uncomplicated and customs free. We
are once again targeting a slight increase in European sales this year.

Let’s take a look at China.

China is beginning to set the pace for the whole world in e-mobility
and digitalisation. We are targeting solid growth in our largest
single market in 2018. After all, BMW is the most attractive, most
innovative premium brand in China. The Chinese government is
accelerating e-mobility. We are likely to see a million new
electrified vehicles registered in China this year alone. Our
customers in China already have six electrified models to choose from.
With ChargeNow they also have access to the world’s largest network of
public charging points.

Further strategic steps include:

Deepening our partnership with Brilliance: From mid-2018, the new BMW
X3 will be built in Shenyang, in addition to the US and South Africa.
From 2020, we will also be producing the iX3 there, the first
all-electric model from our core BMW brand. We are planning another
joint venture with Great Wall Motor, aimed at producing fully electric
MINI vehicles in China. The Chinese government announced its intention
to reduce tariffs and to further open up its car market, showing good
sense and vision in the midst of the current trade dispute. In the
United States,
important political decisions still have to be made, both in trade
policy and domestically. With regard to the upcoming review of fuel
consumption regulations at federal level, we are strongly in favour of
a consistent national standard.

The United States has been the BMW Group’s “second home” for many
years. We contribute greatly to the U.S. economy. In terms of value,
BMW is the largest vehicle exporter in the US, responsible for around
70,000 direct and indirect jobs across the country. We are targeting
slight growth in the US market in 2018. Spartanburg, home to our
biggest plant, will benefit from a further 600 million euros in
investment up to 2021. We are also investing in Mexico, where we will
open our new plant next year. Mexico has relied heavily on free trade
in the past – and benefited as a result. Our plant in San Luis Potosí
will produce for the global market. Global thinking and global action
have made the BMW Group successful. Free trade leads to growth and
prosperity for everyone. That’s a fact. We operate globally – but we
also take responsibility at the local level: for jobs, value creation
and the broader community.

Now, let’s move on to my third point: Products and services.

We are currently in phase II of our model offensive, with another 20
new and revised models for release this year. Two highly emotional
vehicles are here next to the stage: The BMW i8 Roadster and the BMW
Z4 concept car. We will be focusing on two aspects: Luxury and X.
Examples from the highly profitable luxury segment include the new
Phantom and the Cullinan at Rolls-Royce. And, at BMW, the new 8 Series
Coupé, which will be launched still this year. The new 8 Series range
will feature at least six models, including the BMW M8 Gran Coupé,
which showcases the new BMW design language. The new BMW X7, which
will go into production towards the end of the year, is also
resonating with its strong presence.

2018 will be our X year, with:

the new X3,

the cool X2,

the athletic X4, from the summer on,

and, as I can reveal exclusively today: later this year, a
successor to the X5.

Our model offensive goes hand in hand with expansion in our
services. More than 23 million customers used our mobility services
last year. By 2025, we will expand this base to 100 million active
users, offering customers an all-round, all-inclusive package.

We made three important strategic decisions this year:

The full acquisition of DriveNow.

The acquisition of Parkmobile LLC – which makes us the leading
international provider of digital parking solutions.

The planned joint venture with Daimler Group, which will combine
our expertise in mobility services on an equal footing. This is
subject to approval by antitrust authorities.

Dear Shareholders and Shareholder Representatives,

Mobility is a part of our daily lives. The European Commission has
calculated that private households in the EU invest more than a
billion euros in mobility every year. In Germany alone, mobility
needs will increase significantly by 2040, most of that still relying
on cars. The car remains the number one mode of transport. That makes
sense, when you consider that the world’s biggest car manufacturers
reported their highest-ever revenues in 2017. Our industry has always
accomplished great things and continues to play an important role in
the economy and society at large: as an employer, as a taxpayer and as
a driver of innovation.

So, let us focus our full attention on the shift towards sustainable,
digitalised mobility. Mastering that challenge is the central task
facing the German automotive industry – and nothing else. In times of
change, sometimes the big guys win, sometimes the little guys. But,
with absolute certainty, those who prevail are always flexible. I have
been with this company for 26 years. During that time, there have been
many challenges – but the BMW Group has always followed its own clear
path, with innovation, determination and consistency.

That, Ladies and Gentlemen, is why Your Company has been around for
more than 100 years. The performance of the BMW share price reflects
our long-term approach: Between May 2008 and May 2018, its value
increased by over 140 percent. Even during the current transformation,
Your Company remains profitable. We have maintained an EBIT margin of
between eight to ten percent in the Automotive Segment for the past
eight years. This allows us to invest in our future. We intend to make
2018 our ninth consecutive record year. Your commitment towards the
BMW Group gives us the strength and support we need. We can count on
you – and you can rely on the BMW Group, your company. Thank you for
your attention!

Article Media Material.

BMW Group Streaming.

ANNUAL GENERAL MEETING 2018.

CO2 emission information.

The fuel consumption, CO2 emissions and operating range figures were determined according to the prescribed test procedure in the version applicable at the time of type approval (Regulation No 715/2007). The figures refer to a vehicle with basic configuration in Germany and considers the different sizes of the selected wheels/tyres.

Further information on official fuel consumption figures, specific CO2 emission values and the electric power consumption of new passenger cars is included in the following guideline: “Leitfaden über Kraftstoffverbrauch, die CO2-Emissionen und den Stromverbrauch neuer Personenkraftwagen” (Guideline for fuel consumption, CO2 emissions and electric power consumption of new passenger cars), which can be obtained from all dealerships, from Deutsche Automobil Treuhand GmbH (DAT), Hellmuth-Hirth-Str. 1, 73760 Ostfildern-Scharnhausen and at http://www.dat.de.

Related Video Content.

The fuel consumption, CO2 emissions and operating range figures were determined according to the prescribed test procedure in the version applicable at the time of type approval (Regulation No 715/2007). The figures refer to a vehicle with basic configuration in Germany and considers the different sizes of the selected wheels/tyres.

Further information on official fuel consumption figures, specific CO2 emission values and the electric power consumption of new passenger cars is included in the following guideline: “Leitfaden über Kraftstoffverbrauch, die CO2-Emissionen und den Stromverbrauch neuer Personenkraftwagen” (Guideline for fuel consumption, CO2 emissions and electric power consumption of new passenger cars), which can be obtained from all dealerships, from Deutsche Automobil Treuhand GmbH (DAT), Hellmuth-Hirth-Str. 1, 73760 Ostfildern-Scharnhausen and at http://www.dat.de.